Labour Court Database __________________________________________________________________________________ File Number: CD92653 Case Number: LCR13883 Section / Act: S26(1) Parties: REHABILITATION INSTITUTE - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Dispute concerning the closure of the knitwear unit in Ballyfermot.
Recommendation:
5. Having considered the submissions made and in the light of the
financial information provided, the Court is satisfied that the
Institute has no viable option but to close down the unit in
question.
The Court therefore does not recommend concession of the Union's
claim that it should be kept open for a further period but does
recommend that the Institute make every effort to redeploy as many
of the redundant staff as possible.
Division: Mr O'Connell Mr McHenry Mr Rorke
Text of Document__________________________________________________________________
CD92653 RECOMMENDATION NO. LCR13883
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES: REHABILITATION INSTITUTE
(REPRESENTED BY THE FEDERATION OF IRISH EMPLOYERS)
and
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Dispute concerning the closure of the knitwear unit in
Ballyfermot.
BACKGROUND:
2. 1. The knitwear unit was established in 1981. It functioned
as a training unit, for the training of 25-30 disabled people
for open employment. It also provided sheltered employment
for those trainees who would not achieve open employment. The
unit had to operate commercially and was initially successful
but by 1986 sales began to decline due to cheaper foreign
imports.
2. In 1989, a restructuring took place involving 9
redundancies of able-bodied workers. Machinery was updated to
produce a high margin "branded" product to offset the
Institute's reliance on low margin contract work. The new
branded product did not improve the Institute's financial
position as it was unable to compete with the improved quality
of low cost imports. In addition margins for state contracts
from the Army, Gardai etc. continued to decline.
3. On 15th August, 1992, the Union was informed that the
remaining 4 workers would be made redundant as the unit was
not financially viable. The Union could not accept that the
Institute had made every effort to make the unit viable and
sought that the decision be postponed.
4. Local meetings on the proposed closure took place on 26th
August and 14th September, 1992. The dispute was referred to
the Labour Relations Commission and a conciliation conference
was held on 19th October, 1992. No progress was possible and
the dispute was referred to the Labour Court under Section
26(1) of the Industrial Relations Act, 1990. A Labour Court
investigation took place on 13th November, 1992 (the earliest
date suitable to both parties).
UNION'S ARGUMENTS:
3. 1. Restructuring of the unit involving 9 redundancies was
agreed with the Institute in 1989. The Union is convinced
that the Company has not made a serious effort to keep the
unit open. The Union's position is that the closure decision
should be deferred for 2 years to allow the identified
problems to be tackled constructively by both sides.
2. In 1989, the Institute was to break into the high margin
branded knitwear market to offset its dependence on low margin
contract work. To gain a foothold in the high fashion market
there is a long lead in time and a sustained marketing effort
is required. The Institute did not persevere in its task and
there is no evidence of a vigorous sales and marketing push.
3. The Institute never developed a partnership approach with
its workers, particularly in the areas of pricing, quality or
tendering. There is evidence of contracts not being pursued
or achieved at an uneconomic price (details supplied). The
Union questions the costings of the unit put forward by
management. These problems and the commercial realities can
be dealt with by the setting up of an employee/management
task-force to make the unit viable within 2 years.
INSTITUTE'S ARGUMENTS:
4. 1. The Institute has made every effort to make the unit
viable since 1989. This has involved investments in machinery
and marketing. Unfortunately the unit is losing substantial
amounts of money and is unable to compete on the open market
with low cost imports. The margins from contract work is
continually declining. Losses for 1992 are substantial
(details supplied).
2. The unit is in a downward spiral and declining market
share means less trainees. This in turn means less European
Social Fund (E.S.F.) subvention which leads to tighter
margins. At present, the majority of the disabled in the unit
are sheltered workers for whom no funding is available from
the E.S.F.
3. The Institute must accept the need to close the unit. In
January, 1993, a skills training unit will be opened and it
will attract trainee referrals and E.S.F. subvention. The
remaining sheltered workers can be transferred to other units.
The knitwear unit represents a continuing draw on limited
resources and as such cannot be sustained any longer.
Unfortunately the worker's skills cannot be used in other
areas of the Institute. The workers will get the redundancy
terms as agreed at national level with the Union.
RECOMMENDATION:
5. Having considered the submissions made and in the light of the
financial information provided, the Court is satisfied that the
Institute has no viable option but to close down the unit in
question.
The Court therefore does not recommend concession of the Union's
claim that it should be kept open for a further period but does
recommend that the Institute make every effort to redeploy as many
of the redundant staff as possible.
~
Signed on behalf of the Labour Court
John O'Connell
____________________
3rd December, 1992. Deputy Chairman.
J.F./J.C.
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Jerome Forde, Court Secretary.