Labour Court Database __________________________________________________________________________________ File Number: CD92364 Case Number: LCR13740 Section / Act: S26(1) Parties: OMNITRON LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim by the Union for the payment of the first and second phases of the Programme for Economic and Social Progress (P.E.S.P.).
Recommendation:
5. The Court has fully considered the issues raised by the
parties in their oral and written submissions.
The Court takes the view that it is not unreasonable for employees
to expect they should receive the payments laid down under the pay
clauses of the Programme for Economic and Social Progress from the
due dates.
The Court has recognised the financial constraints currently
placed on the Company at this time.
Accordingly the Court recommends that at the end of the third
quarter 1992 the parties should review the situation and the
Company should indicate how it intends meeting its obligations
under the pay provisions of the P.E.S.P.
The Court so recommends.
Division: MrMcGrath Mr Keogh Mr Walsh
Text of Document__________________________________________________________________
CD92364 RECOMMENDATION NO. LCR13740
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: OMNITRON LIMITED
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim by the Union for the payment of the first and second
phases of the Programme for Economic and Social Progress
(P.E.S.P.).
BACKGROUND:
2. The Company produces computers and telecommunications products
for the European market and employs 162 workers. It was formerly
the manufacturing division of L.M. Ericcson and was bought out by
the workforce in 1989. Omnitron became an independent company in
1990 and all the workers are shareholders. The dispute concerns
130 workers. The first phase of P.E.S.P. was due to be paid to
the workers on 1st June, 1991 and the second phase on the 1st
June, 1992. The Company claims that it is unable to pay the
increases on the grounds of its current financial situation
(details supplied to the Court). This was not acceptable to the
Union. The issue was referred to the Labour Relations Commission
on the 4th June, 1991. Conciliation conferences were held on the
5th July, 1991 and 7th April, 1992 but no agreement was reached.
The dispute was referred to the Labour Court by the Labour
Relations Commission on the 22nd June, 1992. A Court hearing was
held on the 10th July, 1992.
UNION'S ARGUMENTS:
3. 1. The Company has continuously put off paying the increases
due to the workers concerned, on the basis of revised budgets,
impending contracts, etc.. The Union contends that the
Company wishes to implement wage cuts throughout the plant.
The introduction of a fixed wage in 1990 (presently #189)
resulted in a wage reduction for the workers. Prior to that
time workers could earn a bonus of 120%. This was
subsequently reduced to 110%.
2. The workers have made a substantial contribution to the
viability of the plant, subsidising it financially by
investing their redundancy money in the Company. The
workforce has been reduced significantly resulting in lower
costs to the Company, while the remaining workers have
increased productivity. The savings to the Company are in the
region of #800,000.
3. The rates of pay of the workers concerned are out of line
with comparable employments in the region (details supplied to
the Court). The Union is aware that other companies in the
area have paid their workers increases due under the P.E.S.P..
Some of these companies have paid the increases while
experiencing severe trading difficulties.
COMPANY'S ARGUMENTS:
4. 1. In its first year as an independent Company, Omnitron
sustained substantial losses. In 1991, 81 workers from all
grades were made redundant. In April, 1991, the Company
announced a pay freeze and in subsequent negotiations advised
the Union that due to its financial position it could not pay
the first phase of P.E.S.P.. The Union sought and was
afforded information on the Company's financial position. In
April, 1992, the Company reiterated that it could not pay the
2nd Phase of P.E.S.P. due to serious financial losses.
2. While in recent times there has been an upturn in business
contacts, the Company is incurring substantial costs in
introducing a new project and this cost must be absorbed. The
projections for the rest of 1992 are for continued losses and
the Company is trying every means possible to minimise these
losses. It cannot sustain cost increases in the coming
months. Management believes that by April, 1993, the Company
will be in a position to fund the increases due and they will
be applied to all categories of personnel. To pay the
increases at this time would jeopardise the Company's position
and ultimately its survival.
RECOMMENDATION:
5. The Court has fully considered the issues raised by the
parties in their oral and written submissions.
The Court takes the view that it is not unreasonable for employees
to expect they should receive the payments laid down under the pay
clauses of the Programme for Economic and Social Progress from the
due dates.
The Court has recognised the financial constraints currently
placed on the Company at this time.
Accordingly the Court recommends that at the end of the third
quarter 1992 the parties should review the situation and the
Company should indicate how it intends meeting its obligations
under the pay provisions of the P.E.S.P.
The Court so recommends.
~
Signed on behalf of the Labour Court
Tom McGrath
_______________________
18th August, 1992. Deputy Chairman
T.O'D./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Tom O'Dea, Court Secretary.