Labour Court Database __________________________________________________________________________________ File Number: CD91397 Case Number: LCR13468 Section / Act: S26(1) Parties: LISADELL TOWELS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim by the Union for the payment of an increase under the first phase of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
7. The Court has considered the views put forward by the parties
in the oral and written submissions.
The Court is cognisant of and notes the union do not dispute the
economic cirucmstances of the company.
The Court considers, that given that the Company was required to
put in place a financial package an important part of which was a
requirement for the employees to make a significant contribution,
there was an obligation at an early stage to consult with the
employees.
It is the view of the Court that the pay increases provided for
under the P.E.S.P should be a charge on the Company.
The Court, recognising the present difficulties recommends that
the Company should discharge its responsibilities under the
P.E.S.P. in the following way.
Phase 1 - to be paid on 9th April, 1992
Phase 2 - to be paid on 9th April, 1993
Phase 3 - to be paid on 9th October, 1993.
On reaching a break-even situaton the parties to agree how
outstanding monies under the P.E.S.P. are to be paid.
The operative date of the P.E.S.P to be 9th April, 1991.
Division: MrMcGrath Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD91397 RECOMMENDATION NO. LCR13468
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26 INDUSTRIAL RELATIONS ACT, 1990
PARTIES: LISADELL TOWELS LIMITED
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim by the Union for the payment of an increase under the
first phase of the Programme for Economic and Social Progress
(P.E.S.P.).
BACKGROUND:
2. The Company, which is situated in Carrickmacross, employs
approximately 180 people and manufactures towels, beer mats etc
for the hotel trade. Most of its product is exported to the U.K.
market.
3. In 1990, the Company launched a four year plan aimed at
increasing productivity, sales and profitability. This required
major capital investment in new plant and changes in work
practices. However, due to a number of factors, there was a slump
in the hotel industry with consequential fall in demand for the
Company's product.
4. The workers were due an increase in pay under the first phase
of the Programme for Economic and Social Progress (P.E.S.P.) with
effect from 1st April, 1991. The Company approached the Union and
claimed inability to pay under Clause 2 of the Programme. The
Union, while acknowledging the Company's difficulties, did not
accept the Company's plea of inability to pay. The matter was
referred to the Labour Relations Commission on 3rd May, 1991. A
conciliation conference was held on 5th July, 1991. As no
agreement was reached the dispute, with the consent of the parties
was referred by the Commission to the Labour Court under Section
26(1)(a)(b) of the Industrial Relations Act, 1990 for
investigation and recommendation. A Court hearing was held in
Dundalk on 8th October, 1991.
UNION'S ARGUMENTS:
5. 1. The proposed wage freeze would have a serious effect on
the workers' living standards. They cannot afford to forgo
any increases, as in addition to family commitments, most
incur considerable expense to get to and from work as they
live a considerable distance from the factory and have no
suitable public transport.
2. The level of wages is low in this industry.
3. The Company's present difficulties are as a result of
its own actions. It embarked on an expansion plan without
consulting its workforce and it now expects them to carry the
main burden of the present recession in the business.
COMPANY'S ARGUMENTS:
6. 1. The market place for the Company's product is in
recession. Sales have fallen which has resulted in short-time
working and a number of redundancies.
2. A new financial package was put together in April, 1991.
It is stringent and is dependent on there being no cost
increases in the next year. This is necessary, in addition to
on-going cost cutting measures, to ensure the continuing
viability of the Company.
3. The Company cannot afford to pay the 1st phase of
P.E.S.P. and remain trading in view of the poor performance of
last year and no likelihood of any improvement in the
immediate future (details supplied to the Court).
RECOMMENDATION:
7. The Court has considered the views put forward by the parties
in the oral and written submissions.
The Court is cognisant of and notes the union do not dispute the
economic cirucmstances of the company.
The Court considers, that given that the Company was required to
put in place a financial package an important part of which was a
requirement for the employees to make a significant contribution,
there was an obligation at an early stage to consult with the
employees.
It is the view of the Court that the pay increases provided for
under the P.E.S.P should be a charge on the Company.
The Court, recognising the present difficulties recommends that
the Company should discharge its responsibilities under the
P.E.S.P. in the following way.
Phase 1 - to be paid on 9th April, 1992
Phase 2 - to be paid on 9th April, 1993
Phase 3 - to be paid on 9th October, 1993.
On reaching a break-even situaton the parties to agree how
outstanding monies under the P.E.S.P. are to be paid.
The operative date of the P.E.S.P to be 9th April, 1991.
~
Signed on behalf of the Labour Court
Tom McGrath
8th November, 1991 -------------------
M.D./U.S. Deputy Chairman