Labour Court Database __________________________________________________________________________________ File Number: CD91127 Case Number: LCR13198 Section / Act: S67 Parties: STEEL COMPANY OF IRELAND - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the redundancy of 5 employees.
Recommendation:
3. The Court having read the submissions of the parties and
heard oral arguments recommends as follows.
1. Both management and Union should meet immediately to
discuss all options short of redundancy with a view to
resolving the present dispute.
2. If no formula can be devised under (1) above, then the
parties will meet to negotiate satisfactory terms for the
closure of the transport section.
3. In the event of the parties not reaching agreement on
severance terms the Court will arrange an immediate hearing,
following which the Court will recommend terms appropriate to
the case.
Division: Ms Owens Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD91127 RECOMMENDATION NO. LCR13198
THE LABOUR COURT
INDUSTRIAL RELATIONS ACTS 1946 AND 1976
SECTION 67, INDUSTRIAL RELATIONS ACT 1946
PARTIES: STEEL COMPANY OF IRELAND
(Represented by the Federation of Irish Employers)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the redundancy of 5 employees.
BACKGROUND:
2. The Company which is wholly owned by the British Steel Group
is seeking to make redundant 4 drivers and 1 relief driver.
Management argue that transport is the Company's second highest
fixed cost and the contracting out of this work will allow for the
Company to invest in machinery to produce steel, thereby making
the remaining jobs more secure. Overheads must be cut because of
the the precarious position of the market at present.
The Union does not accept that redundancies are necessary in this
case and has offered to discuss with the Company, methods of
retaining the transport fleet in a cost effective manner. They
point out that the fleet is small and much of the transporting is
already contracted out.
The dispute was referred to the Conciliation Service of the Labour
Court on the 19th December, 1990. A conciliation conference was
held on 16 January, 1991. Subsequently the Company issued RP1's
to the 5 workers (to become effective on 28 February, 1991). The
Union then held a strike ballot which came out in favour of a
strike with notice to expire on 28 February, 1991. A further
conciliation conference was held on 18 February, 1991 but the
positions of both parties remained unchanged. Both sides
requested a referral to a full Labour Court hearing. A Labour
Court investigation took place on 25 February, 1991.
UNION'S ARGUMENTS:
3. The Company, initially part of the JS Lister Group, was sold
to the Walker Steel Company of Great Britain in 1988.
Subsequently the latter company was taken over by the British
Steel Corporation. At each of the changes of ownership the
workers were given assurances regarding employment levels and
conditions of employment. The Company has now turned around and
said that it is not the policy of the new owners to employ their
own transport. This has been totally rejected by the workers and
in an effort to be as constructive as possible, the Union has
tried to open negotiations with management to see if there was
ways short of redundancy by which the transport fleet could be
made more efficient. The Company's response unfortunately was
that its decision was irreversible and they were only prepared to
discuss the level of compensation.
The Company argued at conciliation that one of the reasons for its
decision was the downturn in the steel business. The Company is,
however, one of the most successful in the steel trade over the
last number of years. The steel trade is notoriously cyclical and
it has just been through 2 or 3 of the best years in its history.
While it is true that some of the Company's competitors have moved
to subcontracting in recent years, it is not true of all of them.
Heiton McFerron Limited, one of the major competitors has not only
retained its fleet but has spent a considerable sum enlarging and
updating its transport.
COMPANY'S ARGUMENTS:
4. The Company is now owned by the British Steel Corporation
which also owns a substantial number of other steel companies in
Ireland, all of whom trade in competition with each other. Of all
these, the Company has the highest cost base. Within the British
Steel companies and in industry generally the current practice is
to subcontract transport work, indeed the Company has been doing
this for many years. The European steel industry as a whole is
experiencing a severe downturn in business, for the Company the
downturn is of the magnitude of 30% (February figures). Research
has shown that this downturn is likely to last until mid 1992 at
the earliest.
In this climate, the Company must examine its cost base and the
second highest fixed overhead is the transport fleet. It is not
possible to compete with subcontractors who have the advantages of
return loads and economies of scale. To continue with its own
transport would require an investment in vehicles. The general
background is that the Company sees its future in adding value to
the product by putting limited investment funds into machinery as
opposed to simply operating as a trading agency. Investing in
machinery to produce steel is seen as the course most likely to
ensure the Company's survival and by definition, the survival of
employment opportunities for the remaining employees.
RECOMMENDATION:
3. The Court having read the submissions of the parties and
heard oral arguments recommends as follows.
1. Both management and Union should meet immediately to
discuss all options short of redundancy with a view to
resolving the present dispute.
2. If no formula can be devised under (1) above, then the
parties will meet to negotiate satisfactory terms for the
closure of the transport section.
3. In the event of the parties not reaching agreement on
severance terms the Court will arrange an immediate hearing,
following which the Court will recommend terms appropriate to
the case.
~
Signed on behalf of the Labour Court
14th March, 1991 Evelyn Owens
J.F./M.O'C. _______________
Deputy Chairman